2023-06-15 22:31:30
US stocks ignore the Federal Reserve and rise more than 1%
US stock indices ignored the words of Jerome Powell, Chairman of the Federal Reserve Bank, to reporters on Wednesday, following the announcement of fixing interest on his funds, when he indicated the possibility of raising interest rates again this year, and continued their rises that began several weeks ago, to end Thursday’s trading with increases exceeding 1%. %.
In Thursday’s trading, the Dow Jones Industrial Average jumped 428 points, representing 1.26% of its value at the beginning of the day. The S&P 500 index added 1.22% after hitting its highest level in 13 months, while the Nasdaq index gained 1.15%, during the same day.
The Federal Reserve fixed the interest rate on its funds on Wednesday, after raising it in the last 10 meetings, but the bank president indicated the possibility of raising interest by about half a percent before the end of this year.
Although those words caused most of the prices to decline for minutes on Wednesday, US stocks regained their strength before the end of trading, which also continued from the first moment of Thursday’s trading until the end of the day.
The most prominent event on Thursday was the start of trading in the shares of the restaurant company “CAVA”, which rose by more than 100% during the day’s trading, after the share price reached more than $44, although the initial offering was carried out at a price of $22 per share.
In Europe, European stocks ended Thursday’s trading lower, after the European Central Bank raised the cost of borrowing as expected, and indicated further tightening of monetary policy in order to curb stubborn inflation.
The Stoxx 600 European shares fell 0.1% at the close, after falling 0.8% earlier in the session.
The European Central Bank raised the deposit rate by 25 basis points to 3.5%, its highest level in 22 years, and this is the eighth consecutive increase in the ECB interest rate. Inflation in the eurozone was 6.1%, more than three times the ECB’s target of 2%.
“This was entirely expected given that ECB President Christine Lagarde had already said two weeks ago that interest rates should be raised further to bring CPI back to target,” Stuart Cole of Equity Capital told Archyde.com.
The banking sector index fell 0.8%, while the technology sector index fell 0.6%. Both are highly sensitive to interest rate movements.
Healthcare stocks rose 0.4%.
H&M shares jumped 3.7% after the Swedish fashion group said it had a good start to the month of June. The retail sector index rose 0.3%.
In a related way, oil prices rose more than 3% yesterday, Thursday, driven by the decline in the dollar and a jump in the consumption of crude by refineries in China, the largest importer of crude in the world.
Brent crude futures rose $2.47, or 3.4%, to $75.67 a barrel, and US West Texas crude increased $2.35, or the equivalent of 3.4%, to close at $70.62 a barrel, upon settlement. This is the highest closing level for both crudes since June 8th.
The market received support from two US reports that showed an unexpected increase in retail sales in May, as well as higher-than-expected applications for unemployment benefits last week, which led to the dollar index falling to its lowest level in five weeks against a basket of other currencies.
A lower US currency makes oil cheaper for holders of other currencies, which could boost demand.
Thursday’s data showed that Chinese oil refineries’ consumption of crude in May increased by 15.4% compared to last year, marking the second highest level ever.
The CEO of Kuwait Petroleum Corporation, Sheikh Nawaf Saud Al-Sabah, said on Thursday that Chinese demand for oil is expected to continue rising during the second half of the year.
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